Derivatives

News about Derivatives, including commentary and archival articles published in The New York Times.

Chronology of Coverage

Jan. 11, 2015

Gretchen Morgenson Fair Game column observes that new Republican-led Congress is already mounting legislative attempts to dismantle regulations established under the 2010 Dodd-Frank Act; examines narrowly-failed bill that would have extended deadline for federally-insured institutions that are still holding collateralized loan obligations and reduce transparency of derivatives trading. MORE

Jan. 3, 2015

Editorial notes Wall Street Journal report showing that hedge funds are increasingly using credit default swaps to wager on whether ailing companies will survive or not; complains that Congress' repeal of anti-speculation provision of Dodd-Frank is enabling these swaps, which played role in 2008 financial crisis; warns that, unless curbed, poorly regulated credit derivatives will contribute to another economic crisis. MORE

Nov. 2, 2014

Gretchen Morgenson Fair Game column examines troubling findings included in the European Central Bank's long-awaited safety and soundness report; notes that half of sampled banks had inadequate practices for calculating and adjusting their holdings for credit risk associated with derivatives trading partners, only one of a number of alarming lapses in asset valuation. MORE

Sep. 3, 2014

The industry has not applied margin requirements evenly across the system. The proposed rule aims to change that. MORE

Aug. 15, 2014

Financial derivatives trading linked to congestion on New York State’s electric grid, market intended to protect power companies and ultimately benefit consumers, has made big profits for trading firms; across nation, investment funds and major banks are wagering billions of dollars on similar so-called congestion contracts, using computer algorithms and teams of PhDs as they chase profits in arcane area that rarely attracts attention. MORE

Jul. 3, 2014

Editorial asserts new Securities and Exchange Commission rule to regulate derivatives is too narrow in scope; says American taxpayers and financial system remain exposed to ravages of unregulated derivatives trading. MORE

Jan. 14, 2014

The regulations will limit attempts by speculators to corner the market in raw materials like corn or grain. MORE

Dec. 24, 2013

UBS and Bank of America agreed to lower their fees on financial contracts with the struggling city that a borrower typically cannot alter even in the case of bankruptcy. MORE

Dec. 23, 2013

Before it declared bankruptcy Detroit made a deal with two banks on money it owed them in line with safe harbor rules for derivatives traders, in what could end up as a better deal than what other creditors receive. MORE

Dec. 17, 2013

Editorial warns that Gary Gensler and Bart Chilton, backbone of the Commodity Futures Trading Commission, are nearing the end of their term; contends Pres Obama's new nominees lack both conviction and technical know-how to vigorously defend and enforce panel's derivatives market reforms. MORE

Dec. 4, 2013

The move is a response to an initiative led by the Commodities Futures Trading Commission’s chairman, Gary Gensler, to increase oversight of derivatives trading in markets like London and Hong Kong. MORE

Nov. 16, 2013

Joe Nocera Op-Ed column praises tenure of outgoing Commodities Futures Trading Commission chairman Gary Gensler, noting that he clarified government's stance on the derivatives market and exposed the Libor interest rate scandal; holds that any doubts about Gensler based on his past as a Wall Street insider should be laid to rest. MORE

Nov. 10, 2013

Editorial warns that the regulation of derivatives could make the financial system safer only if they are aggressively enforced; notes that Congress continues to deny the Commodity Futures Trading Commission the resources it needs to enforce new rules; underscores the need for a strong Volcker Rule, which would end speculative trading by banks. MORE

Oct. 16, 2013

Wall Street is feeling the effects of a Commodity Futures Trading Commission rule it fought hard to tame. MORE

Oct. 1, 2013

The former trader, Javier Martin-Artajo, appears to be fighting extradition but Spanish authorities are expected to cooperate, a senior prosecutor said. MORE

Sep. 25, 2013

The Securities and Exchange Commission wrung an admission of wrongdoing out of the bank, but it did not charge any top executives with misleading disclosure. MORE

Sep. 16, 2013

Global authorities are preparing to levy more than $700 million in fines against JPMorgan Chase over the bank’s huge trading loss in London last year. MORE

Jul. 17, 2013

A look at promising proposals to strengthen capital ratios and regulate the derivatives market. MORE

Jul. 13, 2013

Editorial holds Gary Gensler, chairman of Commodity Futures Trading Commission, got the best deal he could, when commission agreed on new rules regulating international derivative trades but argues it falls short of what is needed to protect global economy; allows deal will force domestic banks and funds into compliance with Dodd-Frank but warns international affiliates will still be allowed to trade recklessly. MORE

Jul. 5, 2013

Editorial criticizes New York Sens Charles Schumer and Kirsten Gillibrand, along with four other Democratic senators, for trying to delay crucial financial regulations on derivatives, which are part of financial reform law passed in 2010; contends they are going against cause of reform and are lobbying for delays that will derail the law. MORE

Jul. 1, 2013

The European Commission says it has found evidence that the banks had tried to prevent exchanges from entering the credit derivatives business between 2006 and 2009. MORE

Jun. 28, 2013

Floyd Norris High & Low Finance column examines revelation that Italy may have employed derivatives, commonly used to avoid taxes or accounting regulations, to make its deficit appear smaller upon entry into euro zone in 1990s. MORE

May. 20, 2013

May. 16, 2013

The Commodity Futures Trading Commission voted in favor of new rules to shine a light on risky Wall Street trading, but the commissioners softened a crucial aspect of the plan in the face of lobbying pressure from banks. MORE

May. 15, 2013

Under pressure from Wall Street lobbyists, federal regulators will soften a rule intended to rein in banks’ domination of a shadowy but lucrative market. MORE

May. 6, 2013

Editorial expresses disappointment with Mary Jo White, new chairwoman of Securities and Exchange Commission, for leading commissioners in her first vote in approving proposal that could leave investors and taxpayers exposed to reckless derivatives trading by banks; calls for stronger regulations on such trading. MORE

May. 1, 2013

Banks and overseas regulators are spending millions to weaken or block new government financial regulations, including more oversight of financial instruments known as derivatives, designed to curtail risky trading practices blamed for 2008 financial crisis; effort is just one front in battle still being waged nearly three years after Congress passed Dodd-Frank law. MORE

Apr. 10, 2013

Editorial warns that several bills in House of Representatives attempting to pre-empt regulation of derivatives must be stopped; warns if bills are approved, effort to reform derivatives, which is central to overall financial reform, will be turned into farce. MORE

Mar. 31, 2013

Gretchen Morgenson Fair Game column observes that demise of Willow Fund, which was sponsored and sold by UBS, is cautionary tale for any investment fund investor; notes that fund was loaded with risky derivatives and credit default swaps. MORE

Mar. 22, 2013

Floyd Norris High & Low Finance column holds that Senate report on JPMorgan Chase's 2012 multibillion-dollar trading loss documents astounding incompetence and stupidity by bank and its regulators; questions whether large banks should be barred from derivatives market altogether. MORE

Mar. 15, 2013

Floyd Norris High & Low Finance column notes that loose American accounting rules allow large banks that trade in derivatives to keep trillions of dollars in assets and liabilities off balance sheets, making it difficult to evaluate their size or compare them; holds such comparisons will be marginally easier when European and American banks start using similar disclosures in first quarter of 2013. MORE

Feb. 15, 2013

Floyd Norris High & Low Finance column cites proposal by Republican Rep Dave Camp of the House Ways and Means Committee that would make substantial changes in taxation of financial instruments; points out that it would change the way derivatives are taxed and the way capital gains are calculated; suggests proposal may be a fresh start to reaching consensus on tax reform. MORE

Nov. 20, 2012

Editorial criticizes Treasury Dept for exempting foreign exchange derivatives from rules under Dodd-Frank reform law; warns that such exemptions could cause another banking crisis. MORE

Nov. 18, 2012

Editorial warns that big banks that control derivatives trading are lobbying to dilute rules that federal regulators are in process of finalizing, which will bring long-overdue transparency and oversight to derivatives market. MORE

Oct. 15, 2012

Editorial deplores federal court decision overturning rule set by the Commodity Futures Trading Commission to limit speculative trading in derivatives; argues that if allowed to stand, ruling will leave economy exposed to continued distortions because derivatives are easily deployed as tools for vast speculation, and could further embolden banks to challenge other Dodd-Frank reforms. MORE

Jun. 10, 2012

Gretchen Morgenson Fair Game column points out state and local governments looking to refinance their bonds are stuck in Wall Street swap deals with high interest rates; recalls that the swaps were supposed to save the public some money and concedes that, before the financial crash, they did; maintains that the cost of refinancing a derivatives-laced municipal bond can be enormous in the form of a termination fee, which borrowers are hesitant to negotiate. MORE

May. 22, 2012

Editorial contends that the Senate Banking Committee should press regulators to explain why risky derivative trading has not been reined in four years after the financial crisis; argues that issue has become particularly pressing in the wake of JPMorgan Chase's $3 billion trading loss. MORE

Mar. 25, 2012

Editorial cautions that Americans and the economy remain at risk because, two years since passage of the Dodd-Frank law, the multitrillion-dollar derivatives market is still dominated by a handful of big banks; urges Pres Obama to provide full-throated support for implementing and enforcing rules contained within the law. MORE

Nov. 27, 2011

Gretchen Morgenson Fair Game column observes many on Wall Street, and some in Congress, are pushing back against a proposed rule in the Dodd-Frank act that aims to promote price transparency in the swaps market; points out opacity hurts customers because they cannot see wide array of prices, but aids dealers in giving them edge that plumps up their profits. MORE

Nov. 6, 2011

Gretchen Morgenson Fair Game column opines lessons of MF Global's failure are that American financial institutions are not impervious to Euro-shocks, and that when those problems reach United States, they usually ride in on a wave of derivatives; holds more transparency is needed about market participants and their financial soundness. MORE

Oct. 28, 2011

Architecture of new Greek bailout may disappoint investors who purchased billions of dollars in derivatives designed to turn profit if Greece defaults on its debt; plan, which asks holders of Greek bonds to accept 50 percent loss on their investment, will avoid default altogether if enough investors accept deal. MORE

Citigroup is facing criticism, mostly from left-leaning groups, for its role in writing a provision in the government spending bill that would undo a major feature in the Dodd-Frank financial overhaul.

Multimedia

As trade kicks off in a landmark stock exchange link between Hong Kong and Shanghai, HKEx CEO Charles Li says it will take months, not years to include IPOs, derivatives and further links Shenzhen. Tara Joseph reports.

Women make up more than half of the work force on Wall Street. But breaking into the highest ranks is still largely a man’s sport.
Women account for just 3 percent of the chief executives in finance, according to the consulting firm Catalyst. In corporate boardrooms, women fill 19 percent of the roles; in executive suites, it’s 16 percent.